Taxes, Sales

Plain English Breakdown

Checked against official source text during the last sync.

Tennessee Sales Tax on Advertising Services

This bill adds a sales tax to advertising services purchased by businesses with annual revenue of $100 million or more in Tennessee, starting January 1, 2027.

What This Bill Does

• Adds a new type of service, called 'advertising,' to the list of items that are taxed under state sales and use tax laws starting January 1, 2027.
• Defines advertising as any written, electronic, or printed communication meant to promote a brand, product, or service to the public.
• Requires businesses with annual revenue of $100 million or more to pay this new tax on advertising services they purchase.
• Gives the Department of Revenue permission to create rules for how this new tax will be applied.

Who It Names or Affects

• Businesses that spend money on advertising and have at least $100 million in annual revenue.
• The Tennessee Department of Revenue, which is responsible for enforcing the new tax law.

Terms To Know

sales and use tax

A tax that people pay when they buy things or businesses pay when they sell things to customers.

advertising services

Services like creating ads, running TV commercials, or placing ads in newspapers or online.

Limits and Unknowns

• The exact amount of money the state will collect from this new tax cannot be predicted with certainty.
• Local governments are expected to receive a portion of the revenue collected by the state.

Official Summary Text

Present law provides that t
here is levied a tax at the rate of the tax levied on the sale of tangible personal property at retail on the sales price of all services taxable under
state sales tax law
.
As of January 1, 2027, this bill adds a
dvertising services purchased by or on behalf of a business entity that generates annual revenue in an amount equal to or greater than
$100
million
as another service that is so taxed
.

"ADVERTISING" DEFINED

As used in
this
bill
, "advertising" means any written, electronic, or printed communication for the purpose of promoting a brand, product, or service to the public in order to create an interest in the brand, product, or service, or induce a person to purchase or use a produ
ct or service and includes sponsorships and television, digital, radio, billboard, and print advertising.

RULEMAKING

This bill authorizes the department of revenue to promulgate rules to effectuate this bill.

Current Bill Text

HOUSE BILL 2493
By Williams

SENATE BILL 2568
By Haile
SB2568
009485
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 67,
relative to the sales and use tax.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-6-205(c), is amended by adding
the following as a new subdivision:
(10) Advertising services purchased by or on behalf of a business entity that
generates annual revenue in an amount equal to or greater than one hundred million
dollars ($100,000,000). For purposes of this subdivision (c)(10), "advertising" means
any written, electronic, or printed communication for the purpose of promoting a brand,
product, or service to the public in order to create an interest in the brand, product, or
service, or induce a person to purchase or use a product or service and includes
sponsorships and television, digital, radio, billboard, and print advertising.
SECTION 2. The Department of Revenue is authorized to promulgate rules to
effectuate this act. The rules must be promulgated in accordance with the Uniform
Administrative Procedures Act, compiled in Tennessee Code Annotated, Title 4, Chapter 5.
SECTION 3. For purposes of promulgating rules, this act takes effect upon becoming a
law, the public welfare requiring it. For all other purposes, this act takes effect January 1, 2027,
the public welfare requiring it.